Bailout expected to pass

There is general agreement in both chambers now and President Bush is on board.

Published September 29, 2008 1:04PM (EDT)

The financial bailout is likely to pass. The New York Times reports that nobody got everything he or she wanted (which is probably a good sign) and there are still unresolved matters:

The measure still faced stiff resistance from Republican and Democratic lawmakers who portrayed it as a rush to economic judgment and an undeserved aid package for high-flying financiers who chased big profits through reckless investments.

With the financial package looming as a final piece of business before lawmakers leave to campaign for the November elections, leaders of both parties in the House and Senate intensified their efforts to sell reluctant members of Congress on the legislation.

All sides had to surrender something. The administration had to accept limits on executive pay and tougher oversight; Democrats had to sacrifice a push to allow bankruptcy judges to rewrite mortgages; and Republicans fell short in their effort to require that the federal government insure, rather than buy, the bad debt.

Even so, lawmakers on all sides said the bill had been significantly improved from the Bush administration’s original proposal.

The vote in the House is expected to take place today, says the Washington Post, with the Senate likely voting Wednesday. Last night, President Bush released a statement endorsing the measure. And it looks like House Minority Leader John Boehner of Ohio has cleared the way for his caucus members to jump aboard:

The measure was forged during a marathon negotiating session between lawmakers from both parties and [Henry] Paulson -- who at one point appeared to negotiators to be on the verge of collapse. Restive Republican lawmakers originally criticized the package as putting taxpayers at risk and violating free-market principles, but many of them appeared Sunday to be dropping their opposition.

[Boehner] emerged last night from a meeting of House Republicans to say he is "encouraging every member whose conscience will allow them to support this." Boehner said he and other GOP leaders made the case that negotiators had improved the bill by gaining a key concession on a plan to limit taxpayer exposure.

The Wall Street Journal’s Gordon Crovitz notes that, a century ago, in 1907, J.P. Morgan did a better job all by himself supervising a similar credit crunch than Henry Paulson and Ben Bernacke have today, and in part because the books for the financial institutions then were more open -- and understandable -- than they are now.

Meanwhile, progressive economist Dean Baker says he can’t think of any good reasons for a bailout.

By Thomas Schaller

Thomas F. Schaller is professor of political science at the University of Maryland, Baltimore County and the author of "Whistling Past Dixie: How Democrats Can Win Without the South." Follow him @schaller67.

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